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2 Oct 2013
GBPUSD Nothing too jazzy, but sterling is still a hit
FXstreet.com (London) - As the old adage goes; “If you can keep your head when all about you are losing theirs, you probably haven’t quite grasped the desperation of your situation.” But, while Europe returns to political instability, and the US has partially shut down its government, Britain has posted steadily improving economic data without fluster.
It has been nothing to set the world alight, but steady and consistent macro numbers have helped to push sterling to 9 month highs against the dollar, GBP/USD reaching USD1.6250. The UK economy has been like the Mumford & Sons of the G7 - you’re never going to go and see an ONS release live, but you’ve heard what they’ve produced, and it’s “alright”.
The UK’s steadily improving pictures was added to today, with the Markit showed that building activity was only slightly off August record highs of 59.1, printing at 58.9 for September.
Residential construction was the strongest performing building sector in September with the fastest expansion since November 2003.
The new Bank of England governor Mark Carney has also been a towering bastion of blandness and calm. While the Fed managed to cause an utter communication breakdown with the markets with speculation of a September taper, the BoE has set out its objective and its stance in a lucid and unambiguous manner. Carney has pledged to keep its benchmark interest rate at a record low of 0.5 percent at least until the unemployment rate, now at 7.7 percent, drops to 7 percent, Though some are betting on an earlier increase, the Bank of England does not currently see a hike in rates happening until 2016.
The downside of the UK’s current macroeconomic consistency is that positives become the new norm, creating greater potential for setbacks on any slowing of UK growth. But while the US and Europe continue to be dogged by artistic difference with their respective management, sterling will continue to perform.
It has been nothing to set the world alight, but steady and consistent macro numbers have helped to push sterling to 9 month highs against the dollar, GBP/USD reaching USD1.6250. The UK economy has been like the Mumford & Sons of the G7 - you’re never going to go and see an ONS release live, but you’ve heard what they’ve produced, and it’s “alright”.
The UK’s steadily improving pictures was added to today, with the Markit showed that building activity was only slightly off August record highs of 59.1, printing at 58.9 for September.
Residential construction was the strongest performing building sector in September with the fastest expansion since November 2003.
The new Bank of England governor Mark Carney has also been a towering bastion of blandness and calm. While the Fed managed to cause an utter communication breakdown with the markets with speculation of a September taper, the BoE has set out its objective and its stance in a lucid and unambiguous manner. Carney has pledged to keep its benchmark interest rate at a record low of 0.5 percent at least until the unemployment rate, now at 7.7 percent, drops to 7 percent, Though some are betting on an earlier increase, the Bank of England does not currently see a hike in rates happening until 2016.
The downside of the UK’s current macroeconomic consistency is that positives become the new norm, creating greater potential for setbacks on any slowing of UK growth. But while the US and Europe continue to be dogged by artistic difference with their respective management, sterling will continue to perform.